Relegating HR to the back burner can cost businesses a bundle, an ADP study concluded recently, suggesting that up to 70 percent of U.S. entrepreneurs treat HR like an “ad-hoc” function, assigning tasks without forethought.
That percentage translates to approximately 1.5 million companies handling the department informally. Not only do ad-hoc HR managers (“aHRMs”) outlay over 13 hours weekly on top of their regular tasks, but each company is basically losing $18,800 annually by assigning HR procedures to untrained workers.
Yet, an overwhelming majority — 98 percent — indicated no plans to change their approach, the study showed. Significantly, three-fourths of survey respondents represented longtime or “mature” companies, suggesting that the habit is not limited to new startups.
"[It's] not surprising that small business owners [assign] the HR function to an employee who might not have an HR background,” ADP’s TotalSource senior vice president Brian Michaud said. “That's just the way many small businesses evolve … But handling employees' crucial HR information, compliance activities, and benefits enrollment is no place to skimp.”
The aHRM survey respondents conveyed hesitation about such issues as compliance, policy enforcement and worker safety — with only 20 percent expressing self-confidence in their extra duties and 80 percent registering discomfort regarding their own capacity to stay atop industry trends.
"These findings tell us that we have a tremendous opportunity to help small businesses possibly avoid costly HR mistakes and potentially save precious time and money," Michaud said.